Spend-downs in Medicaid aren't always bad. If you help a parent spend their money, they may buy a new wheelchair or hearing aid.

An annuity is a fixed sum of money paid every year indefinitely, usually for life. Annuity payouts are often deferred when people buy them.

Medicaid-compliant annuities are immediate, as the name implies. With a Medicaid-compliant annuity, you give a company a lump sum in exchange for a guaranteed income stream for the non-nursing home spouse.

Your father's nursing home bill is $6,000 per month. Your parents have $250,000 in the bank and other countable assets like mutual funds and CDs that could go toward the Medicaid spend down.

Investing $150,000 in a Medicaid-compliant annuity leaves $100,000 in the bank for reserve funds, which may help your father qualify for Medicaid (as of 2019).

"Taxes come into play. Life expectancies come into play. It's not just 'liquidate your accounts and buy the annuity,'" Simasko says.

Other Factors to Consider Simasko stresses that if you're going to look into this option, you want a Medicaid-compliant annuity and not what an insurance salesman may call a "Medicaid-friendly" annuity.

And, of course, if you don't have that much in the bank, it may not make sense to buy any sort of annuity. As noted, this can be a precarious situation.